Narayana Murthy: India should benefit from using new technologies like Chat GPT: Narayana Murthy

“Well, I’m an Indian citizen first and a technology entrepreneur second, so I would wish for India to make tremendous strides, not just in IT but in all sectors,” says NR Narayana Murthy, Founder of Infosys.

What about manufacturing as an industry, because many people are saying that manufacturing is positioned the way services were 40 years ago and maybe it could be the future sector for the next 40 years. What do you think of the policies and positioning of manufacturing?
Well, I wouldn’t claim to know any manufacturing details, but whatever I hear from youngsters and do a lot with youngsters, is that there is a considerable amount of self-confidence among youngsters. You see EVs coming into the market, so many companies have started to produce EVs, even high end cars like Mercedes and others have deployed EVs in India. Then you have electric scooters, electric other vehicles, there is a significant focus on automation, vehicle autonomy and manufacturing productivity is improving and many young people are much more comfortable with manufacturing today than they were 20 years ago. So I think there’s a certain confidence and positivism in the air. There’s a certain kangaroo spirit in the air among youngsters. That’s what I could say because I’m not an expert in this field.

Since we are talking about the next big trend etc, do you think this energy transition could be the next big trend and have you tried Chat GPT by any chance? That made waves.
Of course, of course. Well, my son introduced me to Chat GPT a few months ago and it is a very powerful tool for educating people and I think it will become very, very useful. All this talk about banning Chat GPT in university is not a good idea because the test would be how smart our youngsters are to use Chat GPT to produce very persuasive arguments, very persuasive articles and very persuasive answers. So we will move to the next orbit where chat GPT becomes a part of student life, but then the teachers have to change their attitude to distinguish between answer A and answer B in that orbit. Today we are in a lower orbit. So I am a strong believer in these technologies and I think you should embrace them wholeheartedly and India will benefit.

I also wanted to draw your attention to current events on the capital markets. Do you see any of these new big tech companies like Zomato, Nykaa Paytm etc as the next TCS or Infosys?
Well, I am an Indian citizen first and a technology entrepreneur second, so I would wish for India to make tremendous strides, not only in IT but in all sectors. The companies you spoke of are all promising start-ups. I want them to be successful. I want them to get bigger than Infosys and maybe TCS and that’s going to be good for the country because as long as they can create productive jobs for youth, as long as they can create jobs that provide higher disposable income for youth, I think that it is good for the country. So I wish these companies my best. I want them to be much bigger than Infosys. This is the only way the country can grow.

I read one of your earlier speeches and there was a very interesting quote that caught my attention regarding IPOs and it was about how entrepreneurship is about deferred gratification. Given what’s happening in the capital markets, do you think that entrepreneurs today see IPOs as a substitute for financing and forms of instant gratification, as opposed to the deferred gratification they really should be looking for?
Well, I wouldn’t blame the young entrepreneurs. I would blame the elderly because it’s the job of the elderly, it’s the job of the veterans, it’s the job of experienced venture capitalists to tell the young that delayed gratification will lead to much greater prosperity for these people . That’s exactly what happened at Infosys. In the 80’s there were at least a few of my colleagues who were a bit unhappy, in the 90’s it was more that we hadn’t seen anything, no wealth from Infosys. But then I advised them, I said if you make sacrifices in the short and medium term, you will benefit many, many times more than you otherwise would. So I wouldn’t blame the youngsters, I would rather blame the veterans in the field, the venture capitalists, to advise them on this. I would say so.

I also wanted to talk about how amazing the last 10 years have been for Indian startups. There was ample liquidity, policy action has been positive but now the tide seems to be turning a bit as the funding winter sets in, liquidity is getting tight etc. Do you see any moderation in Indian start-ups and would you believe it? would separate the wheat from the chaff per se?
As I said, this is all part of the business cycle. There was a time when we had a boom in the availability of venture capital. Now that has become much more difficult. This was expected. However, if our entrepreneurs focus on creating a differentiated business value proposition over their competitors and they are able to communicate well with the VCs, I don’t think money becomes an issue. However, in these trying times, they need to realize two important things; First, they must assess the market very carefully.

Unfortunately, there is no established company in India that can assess the market opportunities. This is a big problem in India, so entrepreneurs tend to make an underestimate which leads to overestimation. You should avoid this overestimation. They should have a realistic view and consequently limit their spending and ideally focus on generating positive cash flows as early as possible. I understand it takes time but they should try. If we do all that, I don’t think there will be a problem.

The point you talked about at Infosys yourself, how in the ’90s there was this lack of reward per se, but back then you were given a lot of these offers when people were willing to buy you up for millions of dollars. How difficult was the decision for you at the time and what role does gut feeling versus logic play in your own decision-making?
No, I used to get a very good salary as head of the software group at PCS. So I didn’t do it for money. I took a tenth of the salary when Infosys was founded while giving all my younger co-founders 20% more. So money was never part of our calculations and I am very, very grateful to my wife for this way of living our lives. So I wasn’t very keen on redeeming little money. I wanted to start a company that is highly respected, that is well known across India, that is known at least in the developed world as a company that has demonstrated good corporate governance and all that. That’s how I was able to convince my younger colleagues that they should demonstrate their commitment to deferred gratification by not accepting this offer, and they were all very, very good people, very, very understanding youngsters, and they all accepted. It went on like this.